Snapchat raises $175 million from Fidelity, others investors: Sources

The investment is an extension of Snapchat’s Series F financing round, which the company began raising last year.

businessUpdated: Mar 04, 2016 13:03 IST

Reuters

The Snapchat logo is seen on the door of their headquarters in Venice. (Reuters File Photo)

Snapchat has raised $175 million in fresh funding from Fidelity Investments and other investors, according to a source familiar with the matter.

The investment is an extension of Snapchat’s Series F financing round, which the company began raising last year, the person told Reuters.

Snapchat, which makes a free app for sending messages and videos that disappear in seconds, raised the financing at the same $16 billion valuation it had a year ago, The Wall Street Journal reported, citing people familiar with the matter.

Fidelity bought shares of the company at $30.72 per share in February, the same price at which it bought Snapchat shares in March 2015, the newspaper reported.

The “flat round,” in which a company’s valuation does not grow despite an influx of new money, suggests Snapchat’s valuation may have grown too quickly and investors are now readjusting their expectations.

Still, at $16 billion, Snapchat is the sixth mostly highly-valued venture-backed company in the world, tied with Chinese ride-hailing company Didi Kuaidi.

Fidelity’s investment comes despite the mutual fund’s own wavering about Snapchat’s valuation. Fidelity slashed its stake in the company by 25% during the third quarter last year. But last fall Fidelity marked its stake back up by about 15 percent.

The app provider has worked to expand its fledgling advertising business - its only real form of revenue - and last month formed a partnership with Viacom, which gave Viacom exclusive rights to sell advertising around Snapchat’s content.